BASEL, Switzerland—Alcon is on the road to becoming a standalone company, according to a Novartis (NYSE: NVS) announcement this morning. The Swiss pharmaceutical company said in a statement that it intends to spinoff Alcon, its eyecare division, into a separately-traded standalone company and will seek shareholder approval of the move “at the 2019 [annual general meeting] in line with Swiss corporate law.” The expected completion date of the planned spinoff is the first half of 2019, according to the announcement this morning. Alcon would be incorporated in Switzerland; with Fort Worth continuing to be a key location. Listings are planned on SIX, the Swiss Exchange, and New York Stock Exchange, the statement noted.

The company said the planned spinoff of Alcon, which it acquired in totality in 2011, “would enable Novartis and Alcon to focus fully on their respective growth strategies.” The completion of the transaction is subject to “general market conditions, tax rulings and opinions, final board of directors endorsement” and the shareholder approval, the statement noted.

Novartis began its internal review of the Alcon business unit in January 2017, as VMAIL reported, and indicated that a spinoff was one of the possible outcomes of the review.

In addition, Novartis said Mike Ball will become chairman-designate of Alcon, effective July 1. He will report to Vas Narasimhan, chief executive of Novartis. Ball will focus on “preparing Alcon for the intended spin,” the statement noted, and he will start the process of recruiting a board of directors for Alcon and meeting Novartis shareholders, and other potential investors, in preparation for a potential spinoff.

If Alcon becomes an independent company, Ball would become chairman of Alcon’s board of directors. “In order to focus fully on the Alcon separation, Ball will step down from the executive committee of Novartis on July 1, according to the statement.

David Endicott, chief operating officer of Alcon since July 2016, will be promoted to chief executive of Alcon, also effective July 1. Endicott also will report to Narasimhan until the potential spinoff. Over the coming weeks, Ball will hand over operational management responsibilities to Endicott, according to the statement.

In a presentation posted on its website, Novartis indicated that the “planned spinoff would create the world-leading standalone eyecare devices company,” with projected sales of $3.7 billion in the surgical segment and $3.0 billion in the vision care segment.

Novartis also announced that it will initiate a share buyback of up to $5 billion to be executed by the end of 2019. This action is planned to be largely funded through the proceeds of the divestment to GSK of the consumer health joint venture stake, net of the AveXis acquisition payments, the statement noted.

Novartis chairman Joerg Reinhardt said, "Our strategic review examined all options for Alcon ranging from retention, sale, IPO to spinoff. The review concluded that a spinoff would be in the best interests of Novartis shareholders and … [this] transaction would allow our shareholders to benefit from potential future successes of a more focused Novartis and a standalone Alcon, which would become a publicly traded global medtech leader based here in Switzerland."

The Alcon ophthalmology pharmaceuticals portfolio will remain with Novartis, further strengthening its leading ophthalmology pharmaceuticals business, according to the statement.

The transaction is expected to be tax neutral to Novartis and subject to general market conditions, tax rulings and opinions. A final board endorsement and shareholder approval at the AGM in February 2019 are required for the transaction.

The $5 billion share buyback is planned to be executed by the end of 2019, “in line with capital allocation priorities highlighting confidence in top line growth and margin expansion,” according to the announcement.